March 1, 2011 –
FinCEN Issues Final Rule to Amend the Bank Secrecy Act Regulations

Today, the Financial Crimes Enforcement Network (“FinCEN”) issued a final rule (“Final Rule”) to amend the Bank Secrecy Act (“BSA”) regulations regarding the Report of Foreign Bank and Financial Accounts (“FBARs”).

The FBAR form is used to report a financial interest in, or signature or other authority over, financial accounts maintained outside of the United States.  An FBAR need not be filed if the aggregate value of the account does not exceed $10,000.

When filed, FBARs become part of the BSA database and are used in combination with Suspicious Activity Reports, Currency Transaction Reports and other BSA reports to provide law enforcement and regulatory investigators with valuable information to fight fraud, money laundering, terrorist financing, tax evasion and other financial crimes.
The Final Rule, among others, (i) clarifies whether an account is foreign and therefore reportable as a foreign financial account, (ii) revises the definition of signature or other authority to more clearly apply to individuals who have the authority to control the disposition of assets in the account by direct communication to the foreign financial institution, (iii) clarifies that officers or employees who file an FBAR because of signature or other authority over the foreign financial account of their employers are not expected to personally maintain the records of the foreign financial accounts of their employers, and (iv) clarifies that filers may rely on provisions of the Final Rule in order to determine their reporting obligation in those cases where reporting was properly deferred under prior U.S. Treasury Department guidance.  The Final Rule also provides filing relief in the form of exceptions for certain low-risk accounts such as accounts of a government entity or instrumentality and correspondent accounts used solely for bank-to-bank settlements.

The Final Rule goes into effect on March 28, 2011.

To read a complete copy of the Final Rule at the FinCEN website, click here.